Most economists had expected inflation to fall to 0.9% last month, and have predicted the rate will fall further as the economic fallout of the pandemic continues. CPI is now far below the Bank of England’s 2% target.

Better news for savers

The ONS said clothes retailers, hit during the early days of the lockdown by weaker footfall and then the closure of outlets, resorted to more discount sales than usual to try to shift their stock.

Goods seeing upward pressure on prices included video games and consoles, board games and children’s toys, the ONS said. And the price of knitting wool rose, another sign of the crafts and hobbies popular with people staying at home.

Laura Suter, personal finance analyst at investment platform AJ Bell, said it was likely that as shops start re-opening retailers would deeply discount prices, putting further downward pressure on inflation.

She also pointed to positive news for savers. “For the first time in ages [savers] can now get above inflation interest rates on easy-access savings accounts – from more than one account.”

Core inflation, which excludes energy, food, alcohol and tobacco, held broadly steady at an annual rate of 1.5%.

Inflation as measured by the Retail Prices Index (RPI) – an older measure of inflation which the ONS says is inaccurate, but is widely used in bond markets and for other commercial contracts – dropped to 1.5% from 2.6%.